3 things you did not know about… teaching your child about money

It probably comes as no surprise that you influence your kids significantly – from their taste in music, to their daily routines, to their values in life.

So it’s probably a good idea to know a thing or two about imparting sound financial values to them, from when they are as young as seven years old.

We’ve done the research for you and distilled three simple drills you can incorporate into your everyday interaction with your children.

Let the children ‘pay’

Pretend play is something many children enjoy. You might have seen them take care of a baby doll, whip up a storm in a toy kitchen, or play cashier.

Letting them try paying for stuff in real life may be something they associate with pretend play.

If they are still tiny tots, you get to show them how money works. They will see that if they like a toy or a snack, they need to give something to get it. You can also teach them how to count change.

If they are a little older, they will understand a deeper concept of spending. For instance, if the money had come from a piggy bank, they will understand that money that had been put away previously is gone forever with a purchase.

For teenagers, you may want to task them with picking up groceries for the household. If you plan properly and give them a slightly tighter budget, it gives them practice with shopping for the best deal.

Importantly, the concept of making choices is ingrained in them. Rather than tell them “we cannot afford it” (which in some cases, at least, is a lie), make them see that “we choose not to spend money like that”.

Allow them to make good and bad decisions

If they are to learn about making choices, what better way than to really let them experience it.

Something to consider: When your child goes to Primary 3 or so, consider giving pocket money weekly. That way, your child gets the freedom to shape their own spending and saving behaviour.

If there’s money left over at the end of the week, teach them to save. Use a transparent jar so they can see the savings grow – the visual impact of this cannot be underestimated.

Better yet, train them to make saving the first thing to do as soon as they get their pocket money. Set out several jars – one for savings, one for spending and one for charity.

It is probably going to be hard to do, but do not stop them from wasting money. If your child uses up his pocket money early in the week, you need to hold back on your urges and let him miss a snack or two in school instead of giving him extra money.

Bailing your child out of a tough spot defeats the purpose of the exercise, and in fact, potentially has significant long-term implications. If they do not bear the consequences of bad financial decisions, they will not appreciate the perks of making sound choices either.

They will not learn about working for something they want, which makes it less likely they will treasure what they have.

when they get into trouble, they may instinctively expect to be helped. You do not want to set this tone for their financial future to spare your child a couple of hours of hunger.

Show them, don't tell them

If you are always browsing online stores in your free time or splashing out on a new gadget the moment you lay your eyes on it, do not be surprised if your child does not pick up sound financial habits as quickly.

Yes, you have worked hard and may be able to afford all these comfortably. However, your child does not know that you may have set aside your savings and these purchases are coming out of your “spending” jar.

They may see shopping as a right that they are entitled to. They may chase the newest models or a new wardrobe all the time, instead of being contented. Also, they may get sucked into a competition trap on social media before you know it if they see their friends using the newest laptop or throwing an expensive birthday party.

By then, whatever advice you give your child will ring hollow.

Remember, the young ones are always looking!